Idea worth pursuing?

How do you know which idea is worth pursuing as a business/ initiative/ project? Which idea will make money and which one will just become a wasted effort? Here are some anchors to help you decide:

Any accountant /MBA text book will tell you see what is the Return on investment ( ROI) ?   Wrong.  You might know by now that no great world changing ideas/businesses have come out of a spreadsheet. In fact the other way around. Once creatives are taken over by spreadsheet folks in a firm, innovation dies a quick death, products become mediocre and generally there is business atrophy.

Why does this happen?

When you start with money making in mind, you tend to lose out/deprioritize many things such as 

-      Am I solving a critical problem significantly better than others are doing today?

-      Is the customer experience top notch in what I am building? Am I taking out all the friction that exists today?

-      Have I switched off all conventional rules of this business ? Am I really disrupting/re-imagining the business model to make things better for the customer along the entire journey?

-      Am I aware that I might not have all the answers today? Do I understand that my ability to pivot down the road is more important than I get it right on paper right now?

-      Do I have the best possible team that thinks similarly? 

-      Do I have conviction/passion around this idea that it might change the world ?

It is difficult in today’s world to have an idea that none had before. iPhone wasn’t the first smart phone nor ipod was the first portable music player. Google wasn’t the first search engine and neither was facebook the first social platform. Look up any idea like hotel booking and you will find 1000s of apps that do similar things.

It is more important to be following the above approach than looking for a ‘First in the world’ idea. 

How do you then validate your idea? Should you ask your friends/loved ones or ask some accountants? Should you check online? Do they ‘see’ what you see ? Do they share your passion/conviction on changing the world?

Ultimately let your conviction/passion be the guide to that ‘world changing idea!’ . Do not worry about money. You will realize that its one of the consequences and not the core driver.

Gamified Life

As proportion of digital natives in the population increase , every aspect of life is getting crowdsourced, gamified and peer measured. Ideas get better with contributions from everyone, technology is built jointly and feedback is built into the DNA of enhancing the product automatically. 

Products and services are bought through reviews, ratings on sellers determine the sales volume, participation in product development is incentivised and encouraged. These have profound implications for businesses as they create new products/services. Customers need to come in early in the product life cycle, continuously evaluate/suggest /enhance the product as it develops and then help sell it in the market place through first set of usage reviews. Amazon switches features on and off everyday purely based on customer feedback and business outcome metrics it collects. Human judgement and subjectivity is supported/dominated by customer actions and related metrics. 

No wonder startups focus on user adoption first as the users then literally ' build/enhance' the product from thereon. While this today applies to a small portion of products/services available in the market place today, this would pretty much be the norm in the near future. 

While the above would be de rigueur in B2C, what would be interesting to know is how does this apply in a B2B context? The number of customers/size of ecosystem is smaller and less public. I would presume that the digital natives in B2B will still look to a gamified environment that S/he is so familiar with in many facets of his/her life!

Currency Hype vs Business Model Change

Every second person you know is trading on crypto currency. It has now become the main street casino punting. Many countries are clamping down on this for illicit money laundering and people are scrambling to create new exchanges in the dark web. 

Step back and step out.

Do not miss the real power of the technology behind. The Distributed App world on Ethereum ( in many ways not very dissimilar to Apple app store or Google Play Store) has many applications that are rewriting business models in a number of industries. From automated claim processing triggered by trusted reference data ( Farmer gets paid insurance money when weather.com confirms draught in a region) to transparent running of lotteries, the applications are end less. They are removing middle agents/ knocking down traditional cost structures and bringing transparency that never existed in many industries.

Media does not talk about this, there is no 'hot stock tip to make quick buck' and nobody talks about these.

Agreed that the underlying blockchain technology has its teething troubles, has to overcome some objections but so did e-commerce in its early days. How many of us were comfortable banking online or using credit card online ? Today it has become passé. Same thing will happen to Blockchain. The teething troubles will get ironed out, it will get more secure and the adoption will spiral. 

The true power of Blockchain is not in the headlines on Bitcoin prices! It is in destroying a traditional industry business model for a better one!

Elephant and million blind men

we all know the story of Elephant and 4 blind men ( no offence to the male gender!) 

Something similar is happening in the Startup world. There are some exceptionally strong technical folks who want to make a mark in the world but dont know the business context where their technology skill makes sense.

Ask them the use case / ROI/business justification of technology and they draw blank.


On the other side are the marketers/business folks who can sell anything in the world but are peddling 'me too' stuff wasting their time/money/resources.

Ask them about their plan to stay competitive with a sustainable moat and future proofing and they are short of breath.

Complicating this situation is the lack of respect for the other side. Technical /Delivery folks do not respect marketers and marketers look down upon the technical folks as clueless about the world. 

The % of people who make themselves rounded to know all facets of a business is so small - its one more reason world has 1% rich folks and 70% middle class!

It takes more than one skill to make money and make a business. You can only benefit from appreciating the value everyone brings to the table and more importantly a well rounded you is more critical to this world!

Is Reskilling part of your financial planning?

Business and Innovation cycles are getting shorter and industries are getting disrupted on a daily basis , be it the DistributedApps on the Ethereum platform or Amazonisation or startups in west coast/Bangalore/Israel/Ireland.

While job categories are disappearing, the implication is that skills you learnt a decade ago are not relevant any more. Reskilling will need to repeat every 10 years if not earlier in your active work life. While many plan for retirement and healthcare, very few plan funds for reskilling in later parts of life.  

It would be prudent to plan funds every 10 years as reskilling funds as part of your financial planning.  

This also might mean that you better invest in specific skills that you can learn and deploy in shorter times at smaller costs , rather than spend lacs/thousands of dollars to get one degree.

Better spend 50k every 5 years to learn new specific skills quickly rather than spend 200k in one go .

Firm of the Future - Part II

In the last few years, platforms have become attractive for a number of reasons:

- Non linear revenues : Costs are almost delinked to revenue growth - enabling geometric growth in Profit and corresponding market valuations

- Extensibility of the platforms to multiple markets with minor localisation

- Extensibility of the platforms to multiple product/service categories, multiple customer segments ( e.g. using Amazon as a B2B platform , beyond the original B2C , Adding Artwork as a category etc...)

Platforms bring a different dimension that is hiterhto unknown in the traditional business world. That is taking data from one set of customers and making money by offering this data to another set of customers.

Easier to understand with an example.  A health app ( that encourages/tracks healthy lifestyle/diet/excersize etc ) is free for retail customers to use , update data and track their own health. But the platform owner makes money by offering this data to insurers who can now underwrite better policies thanks to the rich data they have of these customers and their likelihood of getting sick.

By the same logic , a retailer may make more money of the data patterns that it collects of its customers , than by selling groceries to them! ( subject to customer privacy of course!) 

Did you know that Samsung makes more money selling components to Apple than selling its own phones? 

A prerequisite for the Firm of the Future is to have this kind of disruptive thinking that goes beyond traditional business models to make money. Nothing is off limits!

What qualifies as 'Firm of the Future'?

From what markets and investors are rewarding worldwide and from what I see , the following are the qualities of 'Firm of the Future'

1. Asset Light / 'Light' Assets : The firm is light on assets which keeps the asset servicing costs quite low and makes it easy for the firm to 'Pivot' to a new product/market/business model. Its more powerful to have 'light' assets such as Data and Intellectual Property which are lot more rewarding from a perspective of Return on assets. They are also that much harder for a competitor to replicate.

2. People Light: Most of the firm's activities do not depend /directly related to number of humans required to run them. This makes it easy for the firm to reduce/avoid attrition/training/retraining/skill gap/demand -supply issues.

3. Cost Variability - Bulk of the costs of the structure are variable and hence can be directly fine tuned to the market demand. Even better are those whose costs are not linked to revenues !

4. Scalability - A platform is easily scalable vs a manufacturing plant or a services factory. The combination of #3 and #4 means the Profit growth can be geometric and not linear.

5. SMAC - Businesses connect to /leverage Social Media, Mobile, Analytics and Cloud. You might note that all these are closely connected to how millennials live /work and play!

6. Assets  to Services to  Platform : Owning a platform is in many ways a business that relates to the above than a services business or an asset based business.

7. Pivot - The ability to pivot to market demands/poor business model/ business model obsolescence/ better business idea etc - How easy/able is your business to pivot ?


How does your business/ business idea  relate to the above ?